Mercedes plots Tesla attack with $1Bn US electric push

Daimler plans to spend $1 billion to start production of Mercedes-Benz electric vehicles at its Alabama factoryBloomberg | September 23, 2017, 09:58 IST

The company to make plug-in vehicles, batteries at US factory.Daimler plans to spend $1 billion to start production of Mercedes-Benz electric vehicles at its Alabama factory, setting the world’s largest luxury-car maker up to battle with battery-car specialist Tesla on its home turf.

The German automaker will build its fifth battery plant globally and create more than 600 jobs in the region, the company said on Thursday in a statement. The Alabama factory will assemble electric sport utility vehicles, taking on Tesla’s Model X and making Stuttgart-based Daimler the first European company to assemble plug-in autos in the US.

“We’re celebrating our 20th anniversary at our production facility in Tuscaloosa, Alabama, and we’re taking this as an opportunity to expand the operation and further fuel growth,” production chief Markus Schaefer said in a Bloomberg TV interview.

While the investment could ease tensions over President Donald Trump’s claims that too many German cars were being sold to Americans, the real target is certainly the intensifying rivalry with Tesla. Tesla’s flagship Model S sedan outsold the Mercedes S-Class and BMW 7-Series last year in the US, putting pressure on the brands to defend their image as automotive innovators.

Daimler is preparing for a time when sales of battery-powered vehicles finally take off. US sales are projected to grow fourfold from last year to 643,000 in 2021, about 4% of the US auto market. The segment is expected to account more than one-third of sales in 2030.